Coca-Cola Enterprises Inc. Reports Third-Quarter 2002 Results.Business Editors ATLANTA--(BUSINESS WIRE)--Oct. 16, 2002 Coca-Cola Enterprises Coca-Cola Enterprises NYSE: CCE is the largest bottler by volume in the Coca-Cola System. It is the anchor bottler for North America and parts of Europe. The company is the bottler of Coca-Cola and its other soft drink products, and in some areas a few other soft drink (NYSE NYSE See: New York Stock Exchange :CCE CCE Cornell Cooperative Extension CCE Corporate and Continuing Education CCE Coca-Cola Enterprises Inc. CCE Commission de Coopération Environnementale CCE Centre for Continuing Education CCE College of Continuing Education CCE Certified Computer Examiner ): -- Third-quarter 2002 net income per diluted common share was 41 cents, excluding a nonrecurring tax benefit. -- Constant territory physical case volume increased 5 1/2 percent in North America, reflecting the strong success of new brands, highlighted by Vanilla Coke. -- Europe achieved 3 1/2 percent volume growth for the third quarter. -- Company increases full-year 2002 earnings guidance to a range of $1.00 to $1.03 per diluted common share. Coca-Cola Enterprises today reported that third-quarter 2002 net income applicable to common shareowners was $190 million, or 42 cents per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. common share, including a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. tax benefit of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 1 cent per share. Third-quarter 2002 EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (a) totaled $704 million, up 18 percent versus comparable(b) 2001 results. Net income applicable to common shareowners totaled $414 million for the first nine months of 2002, or 91 cents per diluted common share, with EBITDA of $1.88 billion, up 16 percent versus 2001.(b) "Our third-quarter results clearly demonstrate that the improving trends in our financial and operating performance are gaining momentum," said Lowry Low·ry , (Clarence) Malcolm 1909-1957. British writer. His novel Under the Volcano (1947) is recognized as a masterpiece of modern fiction. Noun 1. Lowry - English painter (1887-1976) L. S. F. Kline, chairman and chief executive officer. "Strong sales performance, tight operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. controls and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. cost trends have enabled us to achieve solid operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: expansion this year. By effectively managing all aspects of our business, we're we're Contraction of we are. we're we are strengthening our ability to generate consistent, long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth and improved returns. "A key element in our ability to maintain this operating momentum is price improvement in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , and we are encouraged by the environment for rate improvement that we've we've Contraction of we have. we've have seen in recent weeks," Mr. Kline said. Operating Results With the benefit of new brands and extensions, such as Vanilla vanilla, a plant of the genus Vanilla of the family Orchidaceae (orchid family). Vines of hot, damp climates, most are indigenous to Central and South America, especially Mexico, but are now cultivated in other tropical regions. Coke, diet Coke Diet Coke (sometimes known as Diet Coca-Cola, Coca-Cola Light or Coke Light) is a sugar-free soft drink produced and distributed by The Coca-Cola Company. with Lemon lemon, one of the citrus fruits, from a tree (Citrus limon) of the family Rutaceae (orange family), probably native to India. A small tree (to about 15 ft/5 m tall) with thorny branches and purple-edged white blossoms, it requires a mild, equable climate. , and Minute Maid Minute Maid is a product line of beverages, usually associated with orange juice, but now extends to soft drinks of many kinds, including Hi-C. Minute Maid was the first company to market orange juice concentrate, allowing it to be distributed nationwide and served juice drinks, physical case bottle and can volume increased 5 percent on a comparable basis for the quarter. North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. volume increased 5 1/2 percent and volume in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). increased 3 1/2 percent. Since its June June: see month. introduction, the Company
has sold more than 24 million physical cases of Vanilla Coke in North
America.
"Our new brands and brand extensions, highlighted by the performance of Vanilla Coke, are strengthening our appeal with a broader range of consumers than ever before," said John R. Alm See application lifecycle management and AppWare. ALM - Assembly Language for Multics , president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "In every nonalcoholic non·al·co·hol·ic adj. A beverage usually containing less than 0.5 percent alcohol by volume. beverage category - Coca-Cola Coca-Cola soft drink found throughout the world. [Trademarks:Crowley Trade, 115] See : Ubiquity trademark brands, flavors Flavors - Lisp with object-oriented features by D. Weinreb and D.A. Moon <moon@cambridge.apple.com>, 1980. ["Object-Oriented Programming with Flavors", D.A. Moon, SIGPLAN Notices 21(11):1-8 (OOPSLA '86) (Nov 1986)]. , and water - we are generating solid growth through a combination of powerful brands, excellent local marketing efforts and strong store-by-store execution. "We've been very successful in meeting three of our four key goals this year: building a pipeline of successful new products, working to achieve favorable cost of goods increases, and keeping tight control over operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. ," Mr. Alm said. "We're very confident we will make significant progress in the fourth quarter and in 2003 on our fourth goal - achieving meaningful price realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. in North America. "In Europe, despite difficult weather conditions throughout much of the quarter, we were successful in hurdling hurdling Track-and-field event, a footrace over a series of obstacles called hurdles. Runners must remain in assigned lanes throughout a race, and, though they may knock hurdles down while running over them, they may do so only with a leg or foot, not a hand. growth of more than 12 percent in the same period a year ago. More important, we achieved this growth while also realizing pricing growth of 3 percent," Mr. Alm said. "These balanced European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. results clearly reflect the benefits of our locally focused operating strategies, an approach that will continue to drive increasing profitability." Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: comparable bottle and can net pricing per case rose 1/2 percent in the third quarter and first nine months on a currency neutral basis. For the same periods, North American bottle and can net pricing per case decreased 1/2 percent and pricing in Europe was up 3 percent. All pricing comparisons exclude the effects of franchisor marketing support. Total company bottle and can cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold per case decreased 1 percent for the quarter and 1/2 percent for the first nine months, excluding the effects of currency translations. Income Taxes The Company recorded a nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. income tax benefit in the third quarter totaling $4 million or 1 cent per diluted common share. The Company also reduced its full-year effective tax rate to 34 percent based on the current outlook for profits in 2002. Full-Year 2002 Expectations North American volume growth for full year 2002 is expected to be more than 3 percent. Management expects 2002 volume growth in Europe to total approximately 4 percent, with consolidated volume up in a range of 3 percent to 4 percent. The Company expects full-year 2002 EBITDA in the previously announced range of $2.35 billion to $2.4 billion, including the impact of currency translations. Full-year 2002 earnings per diluted common share are now forecast in a range of $1.00 to $1.03. Free cash flow (defined as EBITDA less capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. , interest expense, cash taxes, and dividends) is expected to exceed $400 million for the full year. The Company will webcast its third quarter conference call with analysts and investors live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the today at 9:00 a.m. ET. The call can be accessed through the Company's website at www.cokecce.com. Coca-Cola Enterprises Inc. (NYSE: CCE) is the world's largest marketer, distributor, and producer of bottle and can liquid nonalcoholic refreshment. Coca-Cola Enterprises sells approximately 80 percent of The Coca-Cola Company's bottle and can volume in North America and is the sole licensed bottler for products of The Coca-Cola Company in Belgium Belgium (bĕl`jəm), Du. België, Fr. La Belgique, officially Kingdom of Belgium, constitutional kingdom (2005 est. pop. 10,364,000), 11,781 sq mi (30,513 sq km), NW Europe. , continental France, Great Britain Great Britain, officially United Kingdom of Great Britain and Northern Ireland, constitutional monarchy (2005 est. pop. 60,441,000), 94,226 sq mi (244,044 sq km), on the British Isles, off W Europe. The country is often referred to simply as Britain. , Luxembourg Luxembourg, province, Belgium Luxembourg, Du. Luxemburg, province (1991 pop. 232,813), 1,706 sq mi (4,419 sq km), SE Belgium, in the Ardennes, bordering on the Grand Duchy of Luxembourg in the east and on France in the south. , Monaco Monaco (mŏn`əkō, mōnä`kō, Fr. mônäkō`), officially Principality of Monaco, independent principality (2005 est. pop. 32,400), c. , and the Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. . Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Included in this news release are several forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. management comments and other statements that reflect management's current outlook for future periods. As always, these expectations are based on the currently available competitive, financial, and economic data along with the Company's operating plans and are subject to future events and uncertainties. The forward-looking statements in this news release should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the detailed cautionary statements found on page 48 of the Company's 2001 Annual Report, and on page 28 of the Company's Second-Quarter 2002 Form 10-Q Form 10-Q See 10-Q. . (a) EBITDA is defined as earnings before interest, taxes, depreciation and amortization. (b) All comparable prior-year figures include the Herb acquisition, and exclude nonrecurring items.
COCA-COLA ENTERPRISES INC.
KEY OPERATING INFORMATION
Currency
Neutral
Third Quarter 2002 Change Change
---------------------------------------------- ----------- -----------
Reported EBITDA 26 1/2 % 23 %
Comparable EBITDA 18 % 15 %
Net Pricing Per Case (Bottle and Can) (a) 2 1/2 % 1/2 %
Cost of Sales Per Case (Bottle and Can) 1 1/2 % (1)%
Physical Case Bottle and Can Volume (b)
Consolidated 5 %
North America 5 1/2 %
Europe 3 1/2 %
Fountain Gallon Volume (1)%
Currency
Neutral
Nine Months 2002 Change Change
---------------------------------------------- ----------- -----------
Reported EBITDA 24 1/2 % 23 1/2 %
Comparable EBITDA 16 1/2 % 15 1/2 %
Net Pricing Per Case (Bottle and Can) (a) 1 % 1/2 %
Cost of Sales Per Case (Bottle and Can) 1/2 % (1/2)%
Physical Case Bottle and Can Volume (b)
Consolidated 4 %
North America 4 %
Europe 4 %
Fountain Gallon Volume Flat
(a) Net pricing per case is calculated as invoice pricing less
allowances.
(b) Volume results have been adjusted to include acquisitions
completed in 2001.
COCA-COLA ENTERPRISES INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; In Millions Except Per Share Data)
Third Quarter
-------------------------
2002 2001 (a) Change
------- ------- ------
Net Operating Revenues $4,549 $4,250 7 %
Cost of Sales 2,810 2,660 6 %
------- -------
Gross Profit 1,739 1,590 9 %
Selling, Delivery, and
Administrative Expenses 1,298 1,375 (6)%
------- -------
Operating Income 441 215 105 %
Interest Expense, Net 166 189
Other Nonoperating Income, Net 2 1
------- -------
Income Before Income Taxes 277 27
Income Tax Expense (b) 86 22
Income Tax Rate Change (Benefit) - (6)
------- -------
Net Income 191 11
Preferred Stock Dividends 1 1
------- -------
Net Income Applicable to
Common Shareowners $ 190 $ 10
======= =======
Basic Average Common Shares
Outstanding 450 442
======= =======
Basic Net Income Per Share
Applicable to Common
Shareowners (c) $ 0.42 $ 0.02
======= =======
Diluted Average Common Shares
Outstanding 458 449
======= =======
Diluted Net Income Per Share
Applicable to Common
Shareowners (c) $ 0.42 $ 0.02
======= =======
EBITDA Data:
Operating Income $ 441 $ 215 105 %
Depreciation 245 228 7 %
Amortization 18 113 (84)%
------- -------
EBITDA $ 704 $ 556 27 %
======= =======
(a) As described on page 28 of the Company's 2001 Annual Report,
approximately $26 million of selling expenses have been
reclassified as deductions from net operating revenue in
accordance with EITF 01-09.
(b) Income tax expense includes a nonrecurring reduction of
$4 million in 2002.
(c) Per share data calculated prior to rounding to millions.
COCA-COLA ENTERPRISES INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; In Millions Except Per Share Data)
Nine Months
---------------------------
2002 2001 (a) Change
-------- -------- ------
Net Operating Revenues $12,639 $11,661 8 %
Cost of Sales 7,794 7,273 7 %
-------- --------
Gross Profit 4,845 4,388 10 %
Selling, Delivery, and
Administrative Expenses 3,732 3,879 (4)%
-------- --------
Operating Income 1,113 509 119 %
Interest Expense, Net 495 568
Other Nonoperating Income, Net 3 1
-------- --------
Income (Loss) Before Income Taxes and
Cumulative Effect of Accounting Change 621 (58)
Income Tax Expense (Benefit) (b) 205 (23)
Income Tax Rate Change (Benefit) - (52)
-------- --------
Net Income Before Cumulative Effect of
Accounting Change 416 17
Cumulative Effect of Accounting Change - (302)
-------- --------
Net Income (Loss) 416 (285)
Preferred Stock Dividends 2 3
-------- --------
Net Income (Loss) Applicable to
Common Shareowners $ 414 $ (288)
======== ========
Basic Average Common Shares
Outstanding 449 427
======== ========
Basic Net Income Per Share
Applicable to Common Shareowners
Before Cumulative Effect (c) $ 0.92 $ 0.03
======== ========
Basic Net Income (Loss) Per Share
Applicable to Common Shareowners (c) $ 0.92 $ (0.67)
======== ========
Diluted Average Common Shares
Outstanding 457 435
======== ========
Diluted Net Income Per Share
Applicable to Common Shareowners
Before Cumulative Effect (c) $ 0.91 $ 0.03
======== ========
Diluted Net Income (Loss) Per Share
Applicable to Common Shareowners (c) $ 0.91 $ (0.67)
======== ========
EBITDA Data:
Operating Income $ 1,113 $ 509 119 %
Depreciation 711 665 7 %
Amortization 56 338 (83)%
-------- --------
EBITDA $ 1,880 $ 1,512 24 %
======== ========
(a) As described on page 28 of the Company's 2001 Annual Report,
approximately $72 million of selling expenses have been
reclassified as deductions from net operating revenue in
accordance with EITF 01-09.
(b) Income tax expense includes a nonrecurring reduction of
$4 million in 2002.
(c) Per share data calculated prior to rounding to millions.
Coca-Cola Enterprises Inc.
Pro Forma Consolidated Statements of Income Excluding Nonrecurring
Items
Unaudited
(In millions, except per share data)
Third Quarter
--------------------------------
2002 (a) 2001 (b)(c) Change
------- ------- ---------
Net Operating Revenues $4,549 $4,238 7 %
Cost of Sales 2,810 2,660 6 %
------- -------
Gross Profit 1,739 1,578 10 %
Selling, Delivery, and
Administrative Expenses 1,298 1,224 6 %
------- -------
Operating Income 441 354 25 %
Interest Expense, Net 166 189
Other Nonoperating Income, Net 2 1
------- -------
Income Before Income Taxes 277 166
Income Tax Expense 90 74
------- -------
Net Income 187 92
Preferred Stock Dividends 1 1
------- -------
Net Income Applicable to
Common Shareowners $ 186 $ 91
======= =======
Basic Average Common Shares
Outstanding (d) 450 445
======= =======
Basic Net Income Per Share
Applicable to Common Shareowners
(d) $ 0.41 $ 0.20
======= =======
Diluted Average Common Shares
Outstanding (d) 458 452
======= =======
Diluted Net Income Per Share
Applicable to Common Shareowners
(d) $ 0.41 $ 0.20
======= =======
EBITDA Data:
Operating Income $ 441 $ 354 25 %
Depreciation 245 228 7 %
Amortization 18 15 20 %
------- -------
EBITDA $ 704 $ 597 18 %
======= =======
Note: This comparable information is provided solely for the
purpose of additional analysis of the results of the Company excluding
nonrecurring items, including the effects of the change in accounting
method adopted as of January 1, 2001 excluding franchise amortization
as if FASB Statement 142 was adopted as of January 1, 2001, and
reflecting the current business arrangement with The Coca-Cola Company
regarding local media expenses, described on page 21 of the Company's
2001 Annual Report, as of January 1, 2001. The presentation is not
intended to be in conformity with the rules governing the preparation
of pro forma financial information, nor is it intended to be a
forecast of future operating results.
(a) Third-quarter 2002 results exclude a nonrecurring reduction in
income taxes of $4 million.
(b) Third-quarter 2001 results exclude a nonrecurring reduction in
income taxes of $6 million, exclude franchise amortization of
$98 million and the related income tax effect, exclude
restructuring and other charges of $41 million, and
reclassifies approximately $12 million of local media to
reductions in net operating revenues.
(c) As described on page 28 of the Company's 2001 Annual Report,
approximately $26 million of selling expenses have been
reclassified as deductions from net operating revenue in
accordance with EITF 01-09.
(d) Basic and diluted shares outstanding have been adjusted to
reflect the balances that would have been outstanding had the
shares issued in connection with the Herb acquisition been
outstanding as of July 1, 2001. Per share data calculated
prior to rounding to millions.
Coca-Cola Enterprises Inc.
Pro Forma Consolidated Statements of Income Excluding Nonrecurring
Items Adjusted to Include the Herb Acquisition as of January 1, 2001
Unaudited
(In millions, except per share data)
Nine Months
-------------------------------
2002 (a) 2001 (b)(c) Change
-------- -------- ------
Net Operating Revenues $12,639 $12,080 5 %
Cost of Sales 7,794 7,554 3 %
-------- --------
Gross Profit 4,845 4,526 7 %
Selling, Delivery, and
Administrative Expenses 3,732 3,644 2 %
-------- --------
Operating Income 1,113 882 26 %
Interest Expense, Net 495 598
Other Nonoperating Income, Net 3 1
-------- --------
Income Before Income Taxes 621 285
Income Tax Expense 209 103
-------- --------
Net Income 412 182
Preferred Stock Dividends 2 3
-------- --------
Net Income Applicable to
Common Shareowners $ 410 $ 179
======== ========
Basic Average Common Shares
Outstanding (d) 449 444
======== ========
Basic Net Income Per Share
Applicable to Common Shareowners
(d) $ 0.91 $ 0.40
======== ========
Diluted Average Common Shares
Outstanding (d) 457 452
======== ========
Diluted Net Income Per Share
Applicable to Common Shareowners
(d) $ 0.90 $ 0.40
======== ========
EBITDA Data:
Operating Income $ 1,113 $ 882 26 %
Depreciation 711 688 3 %
Amortization 56 47 19 %
-------- --------
EBITDA $ 1,880 $ 1,617 16 %
======== ========
Note: This comparable information is provided solely for the
purpose of additional analysis of the results of the Company including
the results of the Herb acquisition as if acquired on January 1, 2001,
excluding nonrecurring items, including the effects of the change in
accounting method adopted as of January 1, 2001, excluding franchise
amortization as if FASB Statement 142 was adopted as of January 1,
2001, and reflecting the current business arrangement with The
Coca-Cola Company regarding local media expenses, described on page 21
of the Company's 2001 Annual Report, as of January 1, 2001. The
presentation is not intended to be in conformity with the rules
governing the preparation of pro forma financial information, nor is
it intended to be a forecast of future operating results.
(a) The nine month results of 2002 exclude a nonrecurring
reduction in income taxes of $4 million.
(b) The nine month results of 2001 exclude the cumulative effect
of a change in accounting principle of $302 million, exclude a
nonrecurring reduction in income taxes of $52 million, exclude
franchise amortization of $293 million and the related income
tax effect, exclude $41 million in restructuring and other
charges, reclassifies approximately $37 million of local media
to reductions in net operating revenues, and include the
results of the Herb acquisition. The addition of the Herb
acquisition resulted in an increase in EBITDA of $63 million,
an increase in operating income of $39 million, and an
increase to net income of $14 million.
(c) As described on page 28 of the Company's 2001 Annual Report,
approximately $72 million of selling expenses have been
reclassified as deductions from net operating revenue in
accordance with EITF 01-09.
(d) Basic and diluted shares outstanding have been adjusted to
reflect the balances that would have been outstanding had the
shares issued in connection with the Herb acquisition been
outstanding as of January 1, 2001. Per share data calculated
prior to rounding to millions.
COCA-COLA ENTERPRISES INC.
PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS
(In Millions)
September 27, December 31,
2002 2001
------------- -------------
(Unaudited)
ASSETS
Current
Cash and cash investments $ 929 $ 284
Trade accounts receivable, net 1,844 1,540
Inventories 789 690
Prepaid expenses and other current
assets 357 362
------------- -------------
Total Current Assets 3,919 2,876
Net Property, Plant, and Equipment 6,267 6,206
Goodwill, Franchise Licenses and Other
Noncurrent Assets, Net 14,991 14,637
------------- -------------
$25,177 $23,719
============= =============
LIABILITIES AND SHAREOWNERS' EQUITY
Current
Accounts payable and accrued expenses $ 2,961 $ 2,718
Current portion of long-term debt 1,719 1,804
------------- -------------
Total Current Liabilities 4,680 4,522
Long-Term Debt, Less Current Maturities 11,078 10,365
Retirement and Insurance Programs and
Other Long-Term Obligations 1,598 1,676
Long-Term Deferred Income Tax Liabilities 4,513 4,336
Shareowners' Equity 3,308 2,820
------------- -------------
$25,177 $23,719
============= =============
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion